Washington, DC— I have been looking forward to this hearing since I introduced the Office to Affordable Housing Task Force Establishment Act of 2017 along with Councilmembers Silverman, Todd, Grosso, Gray, Cheh, and Bonds. As we all know, we have an urgent housing affordability crisis in our city, with the median rent for a 2-bedroom apartment at over $3,000 per month. This makes housing unaffordable, even for middle class workers like police officers and teachers. Others, like parking attendants, security officers, office clerks, and even entry-level professionals, have practically nowhere to turn for housing.

The lack of affordable housing in the District hits close to home for me as I have witnessed almost my entire family priced out of the city that we have called home for five generations. Affordable housing has all but disappeared as gentrification has left a significant portion of our residents economically stranded, especially our most vulnerable. Housing costs consume an overwhelming amount of many family’s resources, with some spending 50% or more of their income on housing.

At the same time owners of older commercial office buildings are having a hard time attracting and retaining commercial tenants as new, state-of-the-art office buildings appear in areas like City Center, The Wharf, and The Yards. Older buildings sit underutilized, leaving building owners and the District at a loss. Right now, our commercial vacancy rate is over 12%, which is becoming an unsustainable drag on our economy and a severe hardship for building owners. And increasing telecommuting and flexible office space opportunities, the drastic increase of online shopping, and rising construction costs have created a downturn in commercial leasing that is not likely to reverse course in the foreseeable future. My Office to Affordable Housing Task Force Establishment Act offers a viable and market-based solution that addresses both issues.

We know that conversions of office buildings to apartment buildings work. In fact, several conversions have already occurred in the District and many more in the region and around the country and the world, dating back several decades. Chicago saw the conversion of the Chicago Motor Club and the Singer Building into condominiums in the mid-1990s, at the same time New York City saw the conversion of the Gulf and Western Building into Trump International Hotel and Tower and nearly 30 other conversions in the city. More recently, Dallas saw the conversion of Mercantile Place, Philadelphia has converted nearly 7 million square feet of office space into housing and hotels, and similar efforts have been underway in Cleveland, Milwaukee, Kansas City, St. Louis, Crystal City, and many other cities and towns. Here in DC, we recently saw the old, empty former Environmental Protection Agency headquarters in Southwest converted into Sky House East and West apartments, and the conversion of 1255 22nd Street, NW is currently amid its construction from an old office building into a mixed-use building. In fact, several developers with a local a presence, including EYA and Forest City, have successfully converted office buildings into housing. There is no doubt that conversions can be done. What has not been done that I can find, is conversions with a specific focus on maximizing affordable and workforce housing.

In addition to providing a real opportunity for housing, there are many benefits to converting our older office buildings into residential buildings. It will increase our property tax base. New residents will add to our income tax base. The adaptive reuse of existing, but underutilized buildings can preserve and repurpose materials and labor, which can result in lower construction costs. And most of our office buildings are in our downtown core where more density could unlock an entirely new economy for services that currently close at 5:00, when office workers go home. I note, however, that not all commercial buildings can be converted into housing, and some conversions are not financially practical.

This bill is step one in a two-step process. It brings to the table the experts who have the specific expertise to help the city understand how much money from the city, and what legal or regulatory changes would be necessary to get conversions done in a way that prioritizes our low- and moderate-income residents. It will help us get an offer, so to speak, on the table for us to enter into public-private partnerships with building owners and housing developers. And I believe we will be able to mitigate costs through Tax Increment Financing, federal low-income tax credits, private endowments, tax abatements, density bonuses, waiving permit fees, and other financial tools that experts can help us identify.

Again, this is a market-based solution; except that instead of the housing market pushing us to meet its needs, we will push the housing market to meet our needs. We will create a blueprint and map out the incentives and respective cost-shares, and I will fight to get the funding as this concept will require public investment. This partnership will be a model for others to follow.

We currently have an Inclusionary Zoning Affordable Housing Program that requires an 8 to 10% set aside for affordable housing units in new residential developments and rehabilitation projects. But 8 to 10% does not produce enough affordable housing. We need to find new ways to maximize the number of affordable units being built in the city. This bill along with all the other incredible work of this committee, can be a new part of the answer.

So far, I have not heard any opposition to this bill, but I am looking forward to hearing your testimonies today. I also look forward to working with the Committee to see this bill to mark-up. Thank you to all who have come to this hearing to testify. I appreciate your input. Thank you, Chairwoman Bonds.

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